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The American auto market has often been driven by emotional purchases: You see a car that you love, and you drive it off the lot the same day. Cars have long held an intimate place in the American imagination, aided by a media industry that loves auto—just think of iconic cars like the 1961 Ferrari 250 GT SWB California Spyder from Ferris Bueller’s Day Off, James Bond’s 1964 Aston Martin DB5, or the 1966 Ford Thunderbird from Thelma & Louise.
Consumers aren’t used to waiting to bring home their new wheels—but that’s exactly what many have had to do in recent years, thanks to a global semiconductor shortage that upended not just the supply chain, but also the auto retail model that’s existed for over 50 years in the US.
Fortunately, it seems that the worst of these supply chain issues is behind us, and vehicle inventory is forecast to reach pre-pandemic norms in 2024. While recent years have been marked by higher prices and interest rates, keeping many consumers out of the market, vehicle prices should decrease in 2024 as the supply chain recovers and the industry is forecast to see constrained growth, giving automotive brands an opportunity to capitalize on pent-up consumer demand.
For marketing and advertising leaders, the key to making the most of this opportunity will be to understand their target audiences’ behaviors, preferences, and perspectives, and to adjust their strategies accordingly.
While 66% of consumers are interested in purchasing a vehicle within the next three years, affordability is still top of mind as prices and interest rates remain high. That doesn’t mean consumers are unwilling to invest in new vehicles, though: In fact, the majority of in-market consumers intend to purchase a new vehicle, which represents a shift from previous years.
To earn consumer dollars, advertisers must understand what their specific audiences care about. Millennials, in particular, present a notable opportunity as not only the largest demographic group in the US, but one that’s demonstrating significant interest in purchasing vehicles in the near future.
As pent-up demand drives purchases in 2024, auto marketers should focus on nurturing brand loyalty, addressing consumer interest in electric vehicles, and making the most of digital advertising opportunities to reach audiences where they spend their time.
In a crowded marketplace where consumers have a wide array of options, dealers and brands must carefully consider how they can cut through the noise and foster brand loyalty.
Today’s consumers want to know what causes and core beliefs they’re supporting when they buy from a certain company. Gen Z and millennials, in particular, have indicated they want to support brands who do more than just sell goods and services—they want to build relationships with companies that are making a difference in the world, making brand values a worthy differentiator in creative messaging.
For some brands, leading with brand values could mean highlighting certain social causes, such as sustainability, as almost half of consumers who either currently own a vehicle or intend to buy one in the next three years favor brands that support social issues and are environmentally conscious.
Be wary, however, of coming across as inauthentic. Consumers today have sensitive radars for insincerity, and if you choose to focus on brand values in your marketing, it’s essential your messaging aligns with your actions behind the scenes.
Speaking of environmentally conscious consumers, demand for hybrid and electric vehicles (EVs) is on the rise: Revenue for EVs will rise 18% this year compared to 2023, and according to a GWI/Basis Technologies survey, close to half of consumers think EVs are the future of transportation. While gas-powered vehicles continue to reign supreme for now, the majority of in-market consumers are willing to consider fully electric or hybrid cars, and adoption is set to grow in the coming years as these models become more affordable.
The clamor around EVs comes against a backdrop of ballooning gas prices and growing consideration and sentiment around sustainability. And from an automaker’s perspective, laws in both California and New York requiring all new car and light truck sales to be EV or emissions-free by 2035, and a new federal regulation intended to guarantee that most new passenger cars and light trucks sold in the US are either all-electric or hybrids by 2032, are providing additional incentive. Throw in better, next-generation battery technology, and the future of auto really does look electric. As such, automakers and dealers are preparing for a future driven by EVs: Many of the industry’s major players have already started making EVs en masse, and they’re putting some serious dollars behind marketing those offerings.
Still, the road to a future powered by EVs isn’t obstacle-free, due in part to lack of charging infrastructure and shortages of the raw materials needed to build batteries. As a result, advertisers can expect the rise of EVs to develop at a more moderate pace. For example, this February, sales of hybrid vehicles rose 62% year-over-year, while YoY EV sales fell.
As interest around EVs evolves, marketers will need to focus on creating greater awareness around their electric vehicles, educating consumers about the benefits of electric mobility and emphasizing their brands’ commitment to sustainability. Both brands and dealers must also find ways to usher EVs into their marketing strategy without cannibalizing or alienating the still critical traditional gas-powered vehicle buyer.
In the current auto retail market, industry marketers will want to leverage digital opportunities to their fullest potential. Consumers are embracing an increasingly digital buying journey, with close to 30% of consumers open to purchasing their next car via an entirely digital process, and 23% preferring to order online but also wanting the benefit of physical touchpoints, such as a test drive. Consumers in the market to lease vehicles are even more open to an entirely online ordering process. Considering this, marketers need to ensure they have a robust presence online to meet audiences where they are.
Leveraging digital advertising is especially important for reaching younger audiences and first-time car buyers who spend much of their time online. This is a significant demographic for auto advertisers, as younger audiences are more likely to buy a car in the short-term future. Digital marketing also allows advertisers to serve targeted, personalized messages to groups of consumers that have the highest likelihood of converting.
Personalization is quickly becoming the norm across the digital ecosystem, with 56% of consumers expecting offers to always be personalized. To earn pent-up consumer dollars, auto marketers will need to understand their consumers on a granular level, reach them at specific moments, in specific places, and on specific devices, and create individualized customer experiences at scale. As such, a data-driven approach to digital marketing will be critical for building and reaching high-quality automotive audiences.
The key to creating a personalized, stress-free car buying experience is consumer data—and with third-party cookies on their way out, marketers will need to set up new systems for gathering information about their customers and meeting them in their moment.
For auto dealers and brands, first-party data offers an avenue for providing personalization at scale. Advanced customer data infrastructure, for example, can collect and unify first-party data from multiple sources—including CRM, website, and ads—to build a single, coherent, and complete view of each customer and their journey. Marketers can then use the collective data to create targeted and personalized marketing campaigns that enable one-to-one communication with consumers.
If first-party data is the wheels that enable marketers to connect with consumers, advertising automation tools are the engines that allow marketers to use that data effectively.
Personalization strategies are inherently nuanced and achieving them at scale requires a level of flexibility and efficiency that is nearly impossible to achieve manually. The fragmented and complex marketing media landscape means advertisers are often slowed down at several stages of the campaign, including planning, performance optimization, and measurement. Advertising automation reduces manual labor and streamlines the campaign life cycle, empowering auto marketers with the agility required to align and shift ad spending in a turbulent market, and ensuring ads are reaching high-value targets to drive measurable outcomes.
After a turbulent few years, automotive advertisers should be able to enjoy a return to some semblance of normalcy in 2024. Making the most of pent-up consumer demand in today’s market will require a deep understanding of today’s consumer base, along with a prioritization of strategies that meet that audience’s behaviors and preferences. Advertisers who take strides in this direction by promoting their brand values, preparing for an EV-focused future, and embracing personalized digital marketing will find themselves well-positioned to earn the business of consumers who are excited to finally purchase a new vehicle this year.